December 3, 2009

The mysteries of the $131 million in New York City equity and the number of arena events

Atlantic Yards Report

As I wrote yesterday, the bond ratings agency Moody's counts $131 million from New York City as an substantial equity component, but that doesn't make sense.

If Moody's is counting city funding for land and infrastructure--and considering the "project" the arena plus infrastructure--it should also count at least some portion of the state's $100 million for infrastructure.

That $131 million figure, nor any other component of equity, is not mentioned in the other ratings agency report on the project, from Standard & Poor's.

Arena events

According to the Standard & Poor's report:

Of the 220 expected annual events at the arena, 41 will be basketball (excluding playoffs) and the remainder will be concerts, family shows, etc. We believe this expectation to be aggressive.

Indeed, they should. After all, the arena sponsors most recently predicted "over 200" events, and the one-time prediction of 225 events a year depended on no competing arenas in either the Meadowlands or Newark.

NoLandGrab: And, unfortunately, there are competing arenas in the Meadowlands and Newark. Is there going to be some magical spike in demand for Sesame Street Live and $300 concert tickets? Not likely, which is just one more reason that the projected revenue stream supporting the arena bonds are as shaky as Jello. Caveat emptor.